Brief Summary

CAPTCHA ("Completely Automated Public Turing test to tell Computers and Humans Apart") is a type of challenge-response test used by many web applications to ensure that the response is not generated by a computer. CAPTCHA implementations are often vulnerable to various kinds of attacks even if the generated CAPTCHA is unbreakable.
This section will help you to identify these kinds of attacks and propose possible solutions.

Description of the Issue

Implementation of good captcha mechanism can be very efficient against:

any enumeration attacks (login, registration or password reset forms are often vulnerable to this kind of attacks - without CAPTCHA the attacker can gain a lot of valid usernames, phone number or any other sensitive information in a short time)

automated sending of many GET/POST requests in a short time where it is undesirable (e.g. SMS/MMS/email flooding), CAPTCHA provides a rate limiting function

automated creation/using of the account that should be used only by humans (e.g. creating webmail accounts, stop spamming)

automated posting to blogs, forums and wikis

any automated attacks than can gain/misuse sensitive information from the application

Using CAPTCHAs as a CSRF protection is not recommended (because there are stronger CSRF protections, see Testing_for_CSRF CSRF countermeasures.

CAPTCHA implementations are often vulnerable to these common attacks:

generated CAPTCHA images are weak, this can be identified (without any complex computer recognition systems) only by simple comparison with already broken captchas

the value of decoded CAPTCHA is sent by client (as a GET parameter or as a hidden field of POST form). This value is often encrypted by simple algorithm and can be easily decrypted by observing of multiple "decoded CAPTCHA" values

many CAPTCHA implementations are vulnerable to replay attacks (they do not keep track what ID of CAPTCHA image is sent to the user. Therefore the attacker can simple retrieve

the appropriate CAPTCHA image and it's ID, solve it and send old values of ID and decoded CAPTCHA)
put the answer along with the corresponding CAPTCHA ID)

many CAPTCHA implementations do not destroy the session when the correct phrase is entered - by reusing the session ID of a known captcha it is possible to bypass CAPTCHA protected page